Organization founded by Zogiani VV: The audit has found violations by LDK

According to the audit for 2016, the LDK has not maintained a real accounting to enable the registration of financial transactions and the preparation of financial mirrors according to Kosovo's applicable accounting standards.

Regarding this finding, LDK Finance Secretary Lutfi Zharku has told Preportr that drafting financial mirrors does not necessarily imply that real accounting should be maintained and that it is not a legal obligation.

For more we think that the CEC should offer standardised software to all political subjects”, Zaku says.

While finding out that the LDK has not applied any tender procedure, which would enable as efficient, cost-free, transparent and fair exploitation of political subject funds, Zharku says political subjects have no legal obligation to implement tender procedures. But according to him, the LDK applies tender procedures in high-value procurement cases, as has been the case with car purchases.

The report says that the LDK is not defined by statute, the possibility of exercising its internal financial control, and the right of members to be informed of all incomes and expenses of political subjects, as well as the responsibility of the financial transaction body.

Both of these violations have been recorded by the audience in 2017.

The next finding stresses that the LDK has paid a single recipient worth over 5 thousand euros within a day contrary to the Law's legal requirements for the Prevention of Money and Terrorism Financing.

During party activities, particularly during the elections, political subjects create large amounts of expenses (the organisation of election events, spot working, television and portals), which should be paid within an extremely short time, while the viewing of service/product in small value is in conflict with laws in power.

Regarding finding out that the LDK has not respected the legal requirements regarding the publishing of annual and campaign financial reports, Lutfi Zharku says it should be done after the same are audited (as it has been acted in the past) as in his opinion the law does not define the issue.

The audience has also found that the LDK has salaries and compensations worth 200 thousand and 308 euros in lack of supporting documents, labour contracts, decisions, etc.

“We were applying standard and alternative auditing procedures we were unable to obtain reasonable security regarding the completeness of this amount for the period completed on December 31, 2016”, the report says.

But Zharku says all wage expenses are correct and “the absence of any decision, or the contract for any employed or temporarily committed person does not question spending as such”.

Reason is lacking for 7 grand and 70 euros

During the audit of the LDK's financial mirrors for 2017, some irregularities in spending have been observed.

According to the auditing report, in the various categories of data worth 71 thousand and 573 euros has included spending on maintenance and renovations worth a total of 7 thousand and 70 euros.

It says that no supporting data on the jobs and services accepted under contract have been provided for the accepted service.

In view of the nature of the notes that hold the political subject, and in the absence of support documentation, we were unable, applying standard and alternative audit procedures, to get reasonable assurances that expenditures worth 7 thousand and 70 euros have occurred and belong to the reporting period”, the report says.

Lutfi Zharku says this has happened because these expenses concern the overhaul of offices of several party branches and that such service has been confirmed by the project manager, appointed by the LDK.

As for the findings that this party during 2017 held more than a bank account contrary to legal requirements, Zharku says the LDK has not been aware of the existence of such a branch account, considering that it was open at the time it was legally permitted.

We have confirmation from all the banks that LDK has operated with only one bank account in recent years. However, through such an account there has been no circulation since 2013, as well as the same one has immediately closed”, Zharku says.

The audience has found that the LDK, in some cases, has used funds for democratisation for other destinations such as repair and maintenance of objects that are not self-registered. The audience also states that tools from the fund for supporting political subjects can be used to finance regular activities of political subjects like: Financing political subject branches, financing relevant units of the organisation of women and youth of political subjects, financing for pre-election and electoral activities of political subjects, financing the activities of parliamentary groups.

But Lutfi Zharku argues the exploitation of these tools, saying that repairs and maintenance of offices as a precondition for the development of party activities are part of the financing of the branches of political subjects.

LDK has declared few donors

Based on financial mirrors that have been made public by the CEC, the LDK during 2009-2012, has received few donations and provided little tenders. This, although in power as at the central level until 2010 (returned to the top of the government after the 2014 parliamentary elections), but also in several municipalities at the local level, has even led from post-war to 2013.

In the 2010 pre-election campaign, as opposed to 2009, the Democratic League of Kosovo, which is the second party in the country, has presented little foreign donor income.

It has declared few donors even during 2011 and 2012. In the financial audit reports of parties published by the Central Election Commission (KQZ), Preportr has found that part of them are businessmen, but that most of them have not received public tenders. Also in 2016 and 2017, this party has declared few donors.

Data from Preportr research shows that seven companies that have financed LDK have won 13 tenders in public institutions. The value of these tenders is 419,631 euros.

However, this fact in no way testifies to the LDK's transparency level in spending public money on the eventual favour of companies close to this political subject.

Audited CEC reports tell of the situation about the party's spending and revenues, as the political subject reported itself. In fact, the LDK has consistently rejected access to financial data required by Preportr.

This article has been implemented under the joint project with the British Embassy in Pristina “Funding of Political parties”. The contents of this scripture are the responsibility of the organisation Arise, and in no way can it be considered the British Embassy's position in Pristina.

The article is published in PROPORTR.